TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) whether the difference between the market value of the properties and the consideration shown in the sale deeds gave rise to a deemed gift taxable under section 4(1)(a) of the Gift-tax Act, 1958; (ii) whether the market value of the properties required fresh determination for computing the taxable amount.
Issue (i): whether the difference between the market value of the properties and the consideration shown in the sale deeds gave rise to a deemed gift taxable under section 4(1)(a) of the Gift-tax Act, 1958.
Analysis: The earlier finding that the transferor was not the owner of the properties for capital gains purposes did not conclude the gift-tax issue against the Revenue. The properties had been treated by the deceased as his own, income from them had been assessed in his hands, and his own conduct, including the wealth-tax valuation, supported the view that the transaction attracted gift-tax on the undervalue element. The Tribunal also noted that the Supreme Court's construction of the corresponding capital-gains provision recognized that the difference between market value and consideration may constitute a gift liable to tax under the Gift-tax Act.
Conclusion: The transfer was liable to be treated as a deemed gift, and the assessee's objection failed on this issue.
Issue (ii): whether the market value of the properties required fresh determination for computing the taxable amount.
Analysis: The assessing authority had proceeded on different valuations, while the appellate authority had not examined the merits of the valuation in detail. The proper market value at the relevant time therefore needed reconsideration so that the tax liability could be computed on a correct factual basis.
Conclusion: The valuation issue was remanded for fresh decision.
Final Conclusion: The Revenue succeeded on the substantive gift-tax question, but the matter was sent back for fresh determination of the correct market value and consequential computation.
Ratio Decidendi: A transfer of property for consideration below market value can attract gift-tax on the undervalue element, and a finding on ownership for capital gains purposes does not by itself defeat gift-tax liability where the transferor's own conduct and the surrounding transaction establish the taxable deemed gift.
TaxTMI 
